COURT OF APPEAL FOR ONTARIO

CITATION: Ayr Farmers Mutual Insurance Company v. Wright, 2016 ONCA 789

DATE: 20161027

DOCKET: C61202

Simmons, Gillese and Hourigan JJ.A.

BETWEEN

Ayr Farmers Mutual Insurance Company

Applicant (Appellant)

and

Scott Wright

Respondent (Respondent)

Daniel Strigberger and Jenna Leigh Meth, for the appellant

James John Mays, for the respondent

Heard: May 2, 2016

On appeal from the order of Justice Paul R. Sweeny of the Superior Court of Justice, dated October 7, 2015, with reasons reported at 2015 ONSC 6219.

Simmons J.A.:

A. Introduction

[1] Under s. 268 of the Insurance Act, R.S.O. 1990, c. I.8 (the “Act”), statutory accident benefits (“SABs”) are provided for in every automobile insurance policy in Ontario so that persons injured in automobile accidents in Ontario and Ontario residents injured in car accidents outside Ontario are entitled to receive SABs regardless of fault.

[2] In this case, Scott Wright applied to Ayr Farmers Mutual Insurance Company for SABs, claiming that he was injured when he tried to close his garage door after backing his vehicle out of his garage.

[3] Ayr Farmers denied Mr. Wright’s claim for SABs, saying that his injuries were not the result of an “accident” as defined in the Statutory Accident Benefits Schedule – Effective September 1, 2010, O. Reg. 34/10 (the “Schedule”), and that he was not therefore entitled to SABs.

[4] Sections 279 to 283 of the Act set out a mandatory scheme for resolving disputes “in respect of any insured person’s entitlement to statutory accident benefits” (the “s. 279 scheme”). The s. 279 scheme requires that parties submit disputes in respect of entitlement to SABs to mediation before any court proceeding can be brought: ss. 279, 281(2).

[5] Mr. Wright applied for mediation under the s. 279 scheme to resolve his dispute with Ayr Farmers.

[6] Rather than attend the mediation, Ayr Farmers issued an application under rule 14 of the Rules of Civil Procedure, R.R.O. 1990, O. Reg. 194, requesting a determination of whether Mr. Wright was involved in an accident within the meaning of the Schedule.

[7] On its application, Ayr Farmers argued that the question whether Mr. Wright was involved in an accident is a preliminary issue that must be determined before the s. 279 scheme applies.

[8] Ayr Farmers emphasized that the s. 279 scheme addresses disputes “in respect of any insured person’s entitlement to statutory accident benefits” and that, under the scheme, it is either an “insured person” or an “insurer” who may submit a dispute to mediation. To qualify as an “insured person” under the Schedule, a SABs claimant must have been involved in an “accident” as defined in the Schedule.

[9] According to Ayr Farmers, where the question whether a claimant was involved in an accident has not been acknowledged or determined, the s. 279 scheme does not apply and either the claimant or the insurer may apply under rule 14 for a determination of that preliminary issue.

[10] The application judge rejected Ayr Farmers’ argument, holding that the s. 279 scheme governs all disputes concerning entitlement to SABs, including whether a claimant was involved in an accident and qualifies as an insured person under the Schedule.

[11] The application judge also found that this was not an appropriate case for an application. In his view, determining whether Mr. Wright was involved in an accident would require examining all the surrounding circumstances. The only material before the court was “a brief line” from Mr. Wright’s application for SABs. In other cases where similar issues had been determined on an application, either there were no material facts in dispute or there was an agreed statement of fact. That was not the case here, and the question whether Mr. Wright was involved in an accident should not be determined on this application.

[12] Ayr Farmers raises two issues on appeal:[^1]

i) Is the question whether Mr. Wright was involved in an accident a preliminary issue that falls outside the s. 279 scheme?

ii) If the answer to i) is yes, can the issue be determined by application?

[13] For the reasons that follow, I conclude that the answer to the first question is no. It is therefore unnecessary that I respond to the second question. I would also note that while both parties acknowledged at the appeal hearing that the s. 279 scheme as it existed as of the date of the hearing before the application judge was amended effective April 1, 2016,[^2] the arguments on this appeal were largely confined to the s. 279 scheme as it existed until March 31, 2016. This judgment should not therefore be read as opining on the amended scheme.

B. Is the question whether Mr. Wright was involved in an accident a preliminary issue that falls outside the s. 279 scheme?

[14] Before turning to Ayr Farmers’ argument, I will set out salient portions of the relevant provisions of the SABs statutory framework as well as relevant principles of statutory interpretation. The full text of all relevant provisions of the Act and Schedule are set out in Appendix “A”.

(1) The SABs statutory framework

(i) Section 268 of the Act

[15] As I have said, under s. 268(1) of the Act, SABs are provided for in every automobile insurance policy in Ontario. Section 268 deems that all such policies include the benefits set out in the Statutory Accident Benefits Schedule:

268(1). Every contract evidenced by a motor vehicle liability policy, including every such contract in force when the Statutory Accident Benefits Schedule is made or amended, shall be deemed to provide for the statutory accident benefits set out in the Schedule and any amendments to the Schedule, subject to the terms, conditions, provisions, exclusions and limits set out in that Schedule. [Emphasis added.]

(ii) The s. 279 scheme

[16] Sections 279 to 283 of the Act set out a mandatory scheme for resolving disputes “in respect of any insured person’s entitlement to statutory accident benefits”.

[17] For the purposes of this appeal, ss. 279(1), 280(1) and 281(2) are key provisions of the s. 279 scheme. I will set those provisions out in full.

[18] Section 279(1) specifies two forms of dispute that must be resolved in accordance with the s. 279 scheme: i) disputes “in respect of any insured person’s entitlement to statutory accident benefits”; and ii) disputes “in respect of the amount of statutory accident benefits to which an insured person is entitled”. Section 279(1) reads as follows:

279(1) Disputes in respect of any insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled shall be resolved in accordance with sections 280 to 283 and the Statutory Accident Benefits Schedule. [Emphasis added.]

[19] Section 280(1) provides an example of the operation of the s. 279 scheme. It specifies that either the “insured person” or the insurer may refer any issue in dispute to a mediator:

280(1) Either the insured person or the insurer may refer to a mediator any issue in dispute in respect of any insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled. [Emphasis added.]

[20] Section 281(2) requires parties to mediate their disputes before bringing a court proceeding or referring an issue to arbitration:

281(2) No person may bring a proceeding in any court, refer the issues in dispute to an arbitrator under section 282 or agree to submit an issue for arbitration in accordance with the Arbitration Act, 1991 unless mediation was sought, mediation failed and, if the issues in dispute were referred for an evaluation under section 280.1, the report of the person who performed the evaluation has been given to the parties.

[21] Following a failed mediation, it is the insured who decides the forum in which to proceed: Liberty Mutual Insurance Company v. Fernandes (2006), 2006 30212 (ON CA), 82 O.R. (3d) 524 (C.A.), at para. 15. Under ss. 281(1)(a) and (b), the insured person can choose to either “bring a proceeding in a court of competent jurisdiction” or “refer the issues in dispute to an arbitrator under section 282”. In contrast, an insurer is limited to requesting the insured’s consent to submit the issue to arbitration, in accordance with the Arbitration Act: s. 281(1)(c) of the Insurance Act.

(iii) The definition of “insured person”

[22] Although the s. 279 scheme uses the phrase “insured person”, the Act contains only a limited definition of that term. Section 279(3) reads as follow:

279(3) For the purposes of this section and sections 280 to 284, "insured person" includes a person who is claiming funeral expenses or a death benefit under the Statutory Accident Benefits Schedule.

[23] The Act does, however include a definition of “insured”. Section 224 of the Act reads, in part, as follows:

224(1) In this Part[^3], […]

“insured” means a person insured by a contract whether named or not and includes every person who is entitled to statutory accident benefits under the contract whether or not described therein as an insured person.

[24] The Schedule contains a more complete definition of “insured person”. Section 3(1) of the Schedule reads, in part, as follows:

3(1) In this Regulation, […]

“insured person” means, in respect of a particular motor vehicle liability policy,

(a) the named insured, any person specified in the policy as a driver of the insured automobile and, if the named insured is an individual, the spouse of the named insured and a dependant of the named insured or of his or her spouse,

(i) if the named insured, specified driver, spouse or dependant is involved in an accident in or outside Ontario that involves the insured automobile or another automobile, or

(ii) if the named insured, specified driver, spouse or dependant is not involved in an accident but suffers psychological or mental injury as a result of an accident in or outside Ontario that results in a physical injury to his or her spouse, child, grandchild, parent, grandparent, brother, sister, dependant or spouse’s dependant,

(b) a person who is involved in an accident involving the insured automobile, if the accident occurs in Ontario, or

(c) a person who is an occupant of the insured automobile and who is a resident of Ontario or was a resident of Ontario at any time during the 60 days before the accident, if the accident occurs outside Ontario; […] [Emphasis added.]

[25] It is well established that the definition of insured person in the Schedule governs the entitlement to SABs: Warwick v. Gore Mutual Insurance Co. (1997), 1997 1732 (ON CA), 32 O.R. (3d) 76 (C.A.)[^4]. Under this definition, Mr. Wright will qualify as an “insured person” only if he was involved in an “accident”, which is also defined in s. 3(1) of the Schedule:

3(1) In this Regulation,

“accident” means an incident in which the use or operation of an automobile directly causes an impairment or directly causes damage to any prescription eyewear, denture, hearing aid, prosthesis or other medical or dental device; […] [Emphasis added.]

(2) Relevant Principles of Statutory Interpretation

[26] The modern approach to statutory interpretation requires that the words of a statute be read "in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament": see Rizzo & Rizzo Shoes Ltd. (Re), 1998 837 (SCC), [1998] 1 S.C.R. 27, at para. 21, quoting from Elmer Driedger, Construction of Statutes, 2d ed. (Toronto: Butterworths, 1983), at p. 87. See also Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559, at para. 26; Wilson v. British Columbia (Superintendent of Motor Vehicles), 2015 SCC 47, [2015] 3 S.C.R. 300, at para. 18; Heritage Capital Corp. v. Equitable Trust Co., 2016 SCC 19, 395 D.L.R. (4th) 656, at para. 27; Rooney v. ArcelorMittal S.A., 2016 ONCA 630, at paras. 10-21.

[27] The rules governing statutory interpretation apply equally to regulations. Importantly, a regulation must be read in the context of the enabling Act, having regard to the purpose of the enabling provisions: Bristol-Myers Squibb Co. v. Canada (Attorney General), 2005 SCC 26, [2005] 1 S.C.R. 533, at paras. 37-38.

[28] The modern approach to statutory interpretation involves a textual, contextual and purposive analysis of the statute or provision in question.

[29] Three factors must be examined: “the language of the provision, the context in which the language is used and the purpose of the legislation or statutory scheme in which the language is found”: Blue Star Trailer Rentals Inc. v. 407 ETR Concession Co., 2008 ONCA 561, 91 O.R. (3d) 321, at para. 23.

[30] In Amos v. Insurance Corporation of British Columbia, 1995 66 (SCC), [1995] 3 S.C.R. 405, at para. 17, Major J. observed that although statutory language cannot be stretched beyond its ordinary meaning, the statute cannot be construed in such a way that defeats the object and intent of the legislation providing coverage to the insured person.

[31] In Ontario, the Legislation Act, 2006, S.O. 2006, c. 21, provides additional guidance regarding the interpretation of legislation.

[32] Section 64(1) of the Legislation Act states that “[a]n Act shall be interpreted as being remedial and shall be given such fair, large and liberal interpretation as best ensures the attainment of its objects”.

[33] Section 64(2) provides that rule of liberal interpretation also applies to regulations, “in the context of the Act under which [the regulation] is made and to the extent that the regulation is consistent with that Act.”

(3) Ayr Farmer’s position on appeal

[34] On appeal, Ayr Farmers’ acknowledges that the s. 279 scheme is a complete code for dealing with disputes between an insured person and an insurer concerning SABs issues, including entitlement to particular kinds of benefits having regard to the injuries sustained and amounts payable. However, it relies on the fact that to qualify as an insured person as defined in the Schedule, Mr. Wright must have been involved in an “accident”, a term which is also defined in the Schedule.

[35] Ayr Farmers submits that the question whether Mr. Wright was involved in an accident – and therefore whether he qualifies as an insured person under the s. 279 scheme – is not a SABs issue but rather a coverage issue. According to Ayr Farmers, before the s. 279 scheme is triggered, the coverage issue must first be determined.

[36] Ayr Farmers contends that coverage issues are generally relatively simple. It says they can be more expeditiously and efficiently dealt with on a rule 14 application rather than under the s. 279 scheme. Coverage exists, or it does not. Coverage issues do not typically benefit from mediation. If the application judge’s interpretation is followed, it will deprive both insurer’s and SABs claimants of the ability to resort to the courts for an expeditious determination of a discrete issue that is unlikely to benefit from the processes built in to the s. 279 scheme.

[37] Ayr Farmers says the application judge erred because he conflated the definition of an “insured” under s. 224 of the Act with the definition of “insured person” under the Schedule. Mr. Wright is not entitled to invoke the 279 scheme just because he is a named insured in the policy. The s. 279 scheme deals with an “insured person’s” entitlement to SABs benefits. To qualify as an insured person under the Schedule it is not enough that Mr. Wright is a named insured – he must also have been involved in an accident as defined in the Schedule.

(4) Discussion

[38] I would not accept Ayr Farmers’ arguments. Adopting a purposive approach to interpreting the s. 279 scheme, in my view, the application judge was correct in holding that it governs all disputes concerning entitlement to SABs, including whether a claimant was involved in an accident. I reach this conclusion for three reasons.

[39] First, the s. 279 scheme establishes a comprehensive alternative process to the courts that includes a separate administrative body for resolving disputes between SABs claimants and insurers concerning entitlement to and the amount of benefits. The s. 279 scheme limits access to the courts and incentivizes claimants to pursue arbitration rather than litigation. In my view, interpreting the s. 279 scheme in a manner that would require either the SABs claimant or an insurer to apply to court for a preliminary determination of whether a claimant qualifies as an insured person is inconsistent with the creation of a comprehensive alternative dispute resolution process.

[40] SABs were introduced in Ontario on June 1, 1990 as part of a threshold no-fault automobile insurance regime that limited the right to sue in tort to cases where injured parties met the threshold of permanent serious physical impairment: James Flaherty and Catherine Zingg, Accident Benefits in Ontario, loose-leaf (Toronto: Thomson Reuters Canada, 2016), at pp. 1-4, 1-5.

[41] At the time SABs were introduced, the legislature also created a body, the Ontario Insurance Commission, as the new regulator of the insurance industry: Insurance Statute Law Amendment Act, 1990, S.O. 1990, c. 2. Later, in 1997, the Commission was succeeded by the Financial Services Commission of Ontario (“FSCO”): Financial Services Commission of Ontario Act, 1997, S.O. 1997, c. 28. FSCO was given a broad mandate that included regulatory, supervisory and dispute resolution responsibilities and powers: Flaherty and Zingg, at p.1-1.

[42] Until April 1, 2016, the Dispute Resolution Services (“DRS”) branch at FSCO was responsible for resolving disputes that fell within the s. 279 scheme. In Chisholm v. Liberty Mutual Group (2002), 2002 45020 (ON CA), 60 O.R. (3d) 776, at para. 21 (C.A.),[^5] Laskin J.A. cited FSCO decisions on entitlement with approval and described FSCO as a “specialized body of arbitrators who routinely adjudicate claims for accident benefits”.

[43] Section 281(2) of the Act expressly states that no person may bring a proceeding in any court unless mediation was sought and failed.

[44] Further, if mediation fails, the s. 279 scheme incentivizes insured persons to refer issues in dispute to arbitration under s. 282 rather than commencing court proceedings. For example, under s. 282(10) of the Act, if a s. 282 arbitrator finds that an insurer unreasonably withheld or delayed SABs payments, the arbitrator shall award a lump sum of up to 50 per cent of the amount to which the person was entitled at the time of the award with interest on the amount at the rate of two per cent per month. This remedy is only available if an insured person proceeds to arbitration with FSCO under s. 282. It thus encourages use of these services and also provides protection against insurers who unreasonably deny SABs claims.

[45] Viewed in the context of this comprehensive alternative dispute resolution scheme, I consider it unlikely that the legislature intended that SABs claimants or insurers would have to bring court proceedings to trigger the s. 279 scheme.

[46] Second, while court proceedings might provide a more expeditious process where it is determined a SABs claimant does not qualify as an insured person, a court proceeding would be duplicative and counter-productive where a SABs claimant does qualify as an insured person.

[47] Because of the prohibition against commencing court proceedings prior to mediation in s. 281(2), the only issue that could be determined on a preliminary court proceeding in a case such as this is the question whether the SABs claimant qualifies as an insured person. On the other hand, if that question falls to be determined under the s. 279 scheme, in the event mediation fails, the claimant is then immediately entitled to choose to proceed with all issues, either by arbitration or litigation.

[48] Viewed in this context, I consider it unlikely that the legislature intended to create a bifurcated process under which either the SABs claimant or the insurer would have to bring a court proceeding before advancing their claim under the s. 279 scheme. Proceeding in that way would only potentially be faster if it were ultimately determined that the claimant did not qualify as an insured person. Moreover, it would deprive SABs claimants of their right under the s. 279 to make the choice of forum.

[49] Third, having regard to the purposes of the Act and the s. 279 scheme, “insured person” as it appears in the s. 279 scheme can reasonably be read as encompassing all persons claiming entitlement to benefits under the Schedule whether or not it is ultimately determined that they are entitled to benefits.

[50] That reading, after all, is consistent with the language of the definition of “insured person” contained in s. 279(3) of the Act, which provides that “‘insured person’” includes a person who is claiming funeral expenses or a death benefit under the Schedule. Moreover, it is consistent with the legislature’s intention of creating a comprehensive, expeditious and efficient dispute resolution scheme.

C. Disposition

[51] Based on the foregoing reasons, I would dismiss the appeal with costs to the respondent on a partial indemnity scale in the agreed upon amount of $10,000 for the appeal and $10,000 for the application below, inclusive of disbursements and applicable taxes, for a total of $20,000.

Released:

“OCT 27 2016” “Janet Simmons J.A.”

“JS” “I agree E.E. Gillese J.A.”

“I agree C.W. Hourigan J.A.”

Appendix ‘A’

Insurance Act, R.S.O. 1990, c. I.8

Part VI Automobile Insurance

Interpretation, Part VI

224. (1) In this Part,

“automobile” includes,

(a) a motor vehicle required under any Act to be insured under a motor vehicle liability policy, and

(b) a vehicle prescribed by regulation to be an automobile; (“automobile”)

“contract” means a contract of automobile insurance that,

(a) is undertaken by an insurer that is licensed to undertake automobile insurance in Ontario, or

(b) is evidenced by a policy issued in another province or territory of Canada, the United States of America or a jurisdiction designated in the Statutory Accident Benefits Schedule by an insurer that has filed an undertaking under section 226.1; (“contrat”)

“excluded driver” means a person named as an excluded driver in an endorsement under section 249; (“conducteur exclu”)

“fault determination rules” means the rules prescribed under paragraph 21 of subsection 121 (1); (“règles de détermination de la responsabilité”)

“health care” includes all goods and services for which payment is provided by the medical, rehabilitation and attendant care benefits provided for in the Statutory Accident Benefits Schedule; (“soins de santé”)

“insured” means a person insured by a contract whether named or not and includes every person who is entitled to statutory accident benefits under the contract whether or not described therein as an insured person; (“assuré”)

“listed expenses” means, in connection with statutory accident benefits, the amounts payable that, under section 288.1, are listed expenses; (“frais désignés”)

“occupant”, in respect of an automobile, means,

(a) the driver,

(b) a passenger, whether being carried in or on the automobile,

(c) a person getting into or on or getting out of or off the automobile; (“personne transportée”)

“public transit” means,

(a) any service for which a fare is charged for transporting the public by automobiles operated by or on behalf of a municipality or a local board as defined in the Municipal Affairs Act, or under an agreement between a municipality and a person, firm or corporation, but does not include special transportation facilities for persons with disabilities or transportation by special purpose facilities such as school buses or ambulances, and

(b) any service prescribed by regulation to be public transit, in the circumstances and subject to the terms, conditions, provisions, exclusions and limits prescribed by the regulation,

but does not include any service prescribed by regulation not to be public transit, in the circumstances and subject to the terms, conditions, provisions, exclusions and limits prescribed by the regulation; (“transport en commun”)

“public transit vehicle” means an automobile while being used for public transit; (“véhicule de transport en commun”)

“service provider’s licence” means a licence issued under section 288.5; (“permis de fournisseur de services”)

“spouse” means either of two persons who,

(a) are married to each other,

(b) have together entered into a marriage that is voidable or void, in good faith on the part of the person asserting a right under this Act, or

(c) have lived together in a conjugal relationship outside marriage,

(i) continuously for a period of not less than three years, or

(ii) in a relationship of some permanence, if they are the natural or adoptive parents of a child; (“conjoint”)

“statutory accident benefits” means the benefits set out in the regulations made under paragraphs 9 and 10 of subsection 121 (1); (“indemnités d’accident légales”)

“Statutory Accident Benefits Schedule” means the regulations made under paragraphs 9 and 10 of subsection 121 (1). (“Annexe sur les indemnités d’accident légales”)

Transition

(2) A reference to Schedule C in any other Act or in any regulation, contract or other instrument shall, in respect of events occurring after the 21st day of June, 1990, be deemed to be a reference to the Statutory Accident Benefits Schedule and a reference to benefits under Schedule C shall be deemed to be a reference to statutory accident benefits.

Idem

(3) Every contract to which subsection 268 (1) applies shall be deemed to have been amended on the 22nd day of June, 1990, to include statutory accident benefits in accordance with the Statutory Accident Benefits Schedule.

Idem

(4) The benefits of a person who, before the 22nd day of June, 1990, was entitled to benefits under Schedule C shall be determined in accordance with the Insurance Act, being chapter 218 of the Revised Statutes of Ontario, 1980, as that Act read immediately before the 22nd day of June, 1990.

Idem

(5) For the purposes of subsections (2) and (4),

“Schedule C” means Schedule C to the Insurance Act, being chapter 218 of the Revised Statutes of Ontario, 1980, as that Act read before the 22nd day of June, 1990.

Additional benefits

(6) An insurer, with the approval of the Superintendent, may offer optional benefits in excess of the benefits that must be provided under the Statutory Accident Benefits Schedule.

Idem

(7) Optional benefits offered under subsection (6) shall be deemed to be statutory accident benefits and the Statutory Accident Benefits Schedule applies to them with necessary modifications.

Statutory accident benefits

268. (1) Every contract evidenced by a motor vehicle liability policy, including every such contract in force when the Statutory Accident Benefits Schedule is made or amended, shall be deemed to provide for the statutory accident benefits set out in the Schedule and any amendments to the Schedule, subject to the terms, conditions, provisions, exclusions and limits set out in that Schedule.

Exception, public transit vehicles

(1.1) Despite subsection (1) and the Statutory Accident Benefits Schedule, no statutory accident benefits are payable in respect of an occupant of a public transit vehicle, in respect of an incident that occurs on or after the date this subsection comes into force, if the public transit vehicle did not collide with another automobile or any other object in the incident.

(1.2), (1.3) Repealed: 1996, c. 21, s. 30 (1).

Indexation

(1.4) Subject to subsection (1.5) and to the terms, conditions, provisions, exclusions and limits established by the Statutory Accident Benefits Schedule, the Schedule shall provide that, in respect of incidents involving the use or operation, after December 31, 1993 and before section 29 of the Automobile Insurance Rate Stability Act, 1996 comes into force, of an automobile,

(a) every continuing periodic amount payable by an insurer as an income replacement benefit, education disability benefit, caregiver benefit or loss of earning capacity benefit in accordance with the Schedule shall be revised, effective the 1st day of January in every year after 1994, using the indexation percentage published under subsection 268.1 (1); and

(b) every monetary amount set out in the Schedule shall be revised, effective the 1st day of January in every year after 1994, by adjusting the amount by the indexation percentage published under subsection 268.1 (1).

No decrease in payments

(1.5) A continuing periodic amount payable by an insurer in accordance with the Statutory Accident Benefits Schedule shall not be reduced by the operation of the indexation percentage referred to in subsection (1.4).

Liability to pay

(2) The following rules apply for determining who is liable to pay statutory accident benefits:

1. In respect of an occupant of an automobile,

i. the occupant has recourse against the insurer of an automobile in respect of which the occupant is an insured,

ii. if recovery is unavailable under subparagraph i, the occupant has recourse against the insurer of the automobile in which he or she was an occupant,

iii. if recovery is unavailable under subparagraph i or ii, the occupant has recourse against the insurer of any other automobile involved in the incident from which the entitlement to statutory accident benefits arose,

iv. if recovery is unavailable under subparagraph i, ii or iii, the occupant has recourse against the Motor Vehicle Accident Claims Fund.

2. In respect of non-occupants,

i. the non-occupant has recourse against the insurer of an automobile in respect of which the non-occupant is an insured,

ii. if recovery is unavailable under subparagraph i, the non-occupant has recourse against the insurer of the automobile that struck the non-occupant,

iii. if recovery is unavailable under subparagraph i or ii, the non-occupant has recourse against the insurer of any automobile involved in the incident from which the entitlement to statutory accident benefits arose,

iv. if recovery is unavailable under subparagraph i, ii or iii, the non-occupant has recourse against the Motor Vehicle Accident Claims Fund.

Liability

(3) An insurer against whom a person has recourse for the payment of statutory accident benefits is liable to pay the benefits.

Choice of insurer

(4) If, under subparagraph i or iii of paragraph 1 or subparagraph i or iii of paragraph 2 of subsection (2), a person has recourse against more than one insurer for the payment of statutory accident benefits, the person, in his or her absolute discretion, may decide the insurer from which he or she will claim the benefits.

Same

(5) Despite subsection (4), if a person is a named insured under a contract evidenced by a motor vehicle liability policy or the person is the spouse or a dependant, as defined in the Statutory Accident Benefits Schedule, of a named insured, the person shall claim statutory accident benefits against the insurer under that policy.

Same

(5.1) Subject to subsection (5.2), if there is more than one insurer against which a person may claim benefits under subsection (5), the person, in his or her discretion, may decide the insurer from which he or she will claim the benefits.

Same

(5.2) If there is more than one insurer against which a person may claim benefits under subsection (5) and the person was, at the time of the incident, an occupant of an automobile in respect of which the person is the named insured or the spouse or a dependant of the named insured, the person shall claim statutory accident benefits against the insurer of the automobile in which the person was an occupant.

Excess insurance

(6) The insurance mentioned in subsection (1) is excess insurance to any other insurance not being automobile insurance of the same type indemnifying the injured person or in respect of a deceased person for the expenses.

Idem

(7) The insurance mentioned in subsection (1) is excess insurance to any other insurance indemnifying the injured person or in respect of a deceased person for the expenses.

Payments pending dispute resolution

(8) Where the Statutory Accident Benefits Schedule provides that the insurer will pay a particular statutory accident benefit pending resolution of any dispute between the insurer and an insured, the insurer shall pay the benefit until the dispute is resolved.

Dispute Resolution — Statutory Accident Benefits

Dispute Resolution

279. (1) Disputes in respect of any insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled shall be resolved in accordance with sections 280 to 283 and the Statutory Accident Benefits Schedule.

Opting out

(2) Any restriction on a party’s right to mediate, litigate, appeal or apply to vary an order as provided in sections 280 to 284, or on a party’s right to arbitrate under section 282, is void except as provided in the regulations.

Meaning of “insured person”, ss. 279 to 284

(3) For the purposes of this section and sections 280 to 284,

“insured person” includes a person who is claiming funeral expenses or a death benefit under the Statutory Accident Benefits Schedule.

Orders

(4) The Director and every arbitrator appointed by the Director shall determine issues before them by order and may make an order subject to such conditions as are set out in the order.

Interim orders

(4.1) The Director and every arbitrator appointed by the Director may make interim orders pending the final order in any matter before the Director or arbitrator.

Power to bind parties

(5) If an insurer or an insured is represented in a mediation under section 280, an evaluation under section 280.1, an arbitration under section 282, an appeal under section 283 or a variation proceeding under section 284, the mediator, person performing the evaluation, arbitrator or Director, as the case may be, may adjourn the proceeding, with or without conditions, if the representative is not authorized to bind the party he or she represents.

Mediation

280. (1) Either the insured person or the insurer may refer to a mediator any issue in dispute in respect of the insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which the insured person is entitled.

Starting the process

(2) The party seeking mediation shall file an application for the appointment of a mediator with the Commission.

Mediator’s appointment

(3) The Director shall ensure that a mediator is appointed promptly.

Mediation

(4) The mediator shall enquire into the issues in dispute and attempt to effect a settlement of as many of the issues as possible within the time prescribed in the regulations for the settlement of the type of dispute in question.

Extension of time

(5) The parties may by agreement extend the time for the completion of the mediation process, even if the time for completion has expired.

Notice of failure

(6) If at any time before a settlement is effected the mediator is of the opinion that mediation will fail, he or she shall forthwith notify the parties.

Idem

(7) Mediation has failed when the mediator has given notice to the parties that in his or her opinion mediation will fail, or when the prescribed or agreed time for mediation has expired and no settlement has been reached.

Report

(8) If mediation fails, the mediator, in addition to any notice required to be given, shall prepare and give to the parties a report,

(a) setting out the insurer’s last offer and the mediator’s description of the issues that remain in dispute;

(b) containing a list of materials requested by the parties that have not been produced and that, in the opinion of the mediator, were required for the purpose of discussing a settlement of the issues; and

(c) containing a recommendation as to whether or not the issues in dispute should be referred for an evaluation under section 280.1.

Same

(9) The mediator may give his or her report to a person performing an evaluation under section 280.1 or an arbitrator conducting an arbitration under section 282.

Neutral evaluation

280.1 (1) If mediation fails, the parties jointly or the mediator who conducted the mediation may, for the purpose of assisting in the resolution of the issues in dispute, refer the issues in dispute to a person appointed by the Director for an evaluation of the probable outcome of a proceeding in court or an arbitration under section 282.

Evaluator’s appointment

(2) The Director shall ensure that a person is appointed promptly to perform the evaluation.

Information

(3) The insurer and the insured person shall provide the person performing the evaluation with any information that he or she requests.

Opinion and report

(4) The person performing the evaluation shall give the parties,

(a) an oral opinion on the probable outcome of a proceeding in court or an arbitration under section 282; and

(b) a written report,

(i) stating that the issues in dispute were evaluated by the person,

(ii) identifying the issues that were evaluated,

(iii) identifying the issues that remain in dispute,

(iv) setting out the insurer’s last offer, and

(v) containing a list of materials requested by the person performing the evaluation that were not provided by the parties.

Same

(5) The person who performed the evaluation may give his or her written report to an arbitrator conducting an arbitration under section 282.

Litigation or arbitration

281. (1) Subject to subsection (2),

(a) the insured person may bring a proceeding in a court of competent jurisdiction;

(b) the insured person may refer the issues in dispute to an arbitrator under section 282; or

(c) the insurer and the insured person may agree to submit any issue in dispute to any person for arbitration in accordance with the Arbitration Act, 1991.

Limitation

(2) No person may bring a proceeding in any court, refer the issues in dispute to an arbitrator under section 282 or agree to submit an issue for arbitration in accordance with the Arbitration Act, 1991 unless mediation was sought, mediation failed and, if the issues in dispute were referred for an evaluation under section 280.1, the report of the person who performed the evaluation has been given to the parties.

Payment pending dispute resolution

(3) Subject to subsection (4), if mediation fails, the insurer shall pay statutory accident benefits in accordance with the last offer of settlement that it had made before the failure until otherwise agreed by the parties or until otherwise ordered by a court, by an arbitrator acting under this Act or the Arbitration Act, 1991, or by the Director.

Same

(4) If a dispute involves a statutory accident benefit that the insurer is required to pay under subsection 268 (8) and no step authorized by subsection (1) has been taken within 45 days after the day mediation failed, the insurer shall pay the insured in accordance with the last offer made by the insurer before the failure until otherwise agreed by the parties or until otherwise ordered by a court, by an arbitrator acting under this Act or the Arbitration Act, 1991, or by the Director.

(5) Repealed: 2002, c. 24, Sched. B, s. 39 (5).

Limitation period

281.1 (1) A mediation proceeding or evaluation under section 280 or 280.1 or a court proceeding or arbitration under section 281 shall be commenced within two years after the insurer’s refusal to pay the benefit claimed.

Exception

(2) Despite subsection (1), a proceeding or arbitration under clause 281 (1) (a) or (b) may be commenced,

(a) if there is an evaluation under section 280.1, within 30 days after the person performing the evaluation reports to the parties under clause 280.1 (4) (b);

(b) if mediation fails but there is no evaluation under section 280.1, within 90 days after the mediator reports to the parties under subsection 280 (8).

Arbitration

282. (1) An insured person seeking arbitration under this section shall file an application for the appointment of an arbitrator with the Commission.

Arbitrator’s appointment

(2) The Director shall ensure that an arbitrator is appointed promptly.

Determination of issues

(3) The arbitrator shall determine all issues in dispute, whether the issues are raised by the insured person or the insurer.

Procedures

(4) The arbitration shall be conducted in accordance with the procedures and within the time-limits set out in the regulations.

(5)-(9) Repealed: 1996, c. 21, s. 38 (3).

Special award

(10) If the arbitrator finds that an insurer has unreasonably withheld or delayed payments, the arbitrator, in addition to awarding the benefits and interest to which an insured person is entitled under the Statutory Accident Benefits Schedule, shall award a lump sum of up to 50 per cent of the amount to which the person was entitled at the time of the award together with interest on all amounts then owing to the insured (including unpaid interest) at the rate of 2 per cent per month, compounded monthly, from the time the benefits first became payable under the Schedule.

Expenses

(11) The arbitrator may award, according to criteria prescribed by the regulations, to the insured person or the insurer, all or part of such expenses incurred in respect of an arbitration proceeding as may be prescribed in the regulations, to the maximum set out in the regulations.

Interim award of expenses

(11.1) The arbitrator may at any time during an arbitration proceeding make an interim award of expenses, subject to such terms and conditions as may be established by the arbitrator.

Liability of representative for costs

(11.2) An arbitrator may make an order requiring a person representing an insured person or an insurer for compensation in an arbitration proceeding to personally pay all or part of any expenses awarded against a party if the arbitrator is satisfied that,

(a) in respect of a representative of an insured person, the representative commenced or conducted the proceeding without authority from the insured person or did not advise the insured person that he or she could be liable to pay all or part of the expenses of the proceeding;

(b) in respect of a representative of an insured person, the representative caused expenses to be incurred without reasonable cause by advancing a frivolous or vexatious claim on behalf of the insured person; or

(c) the representative caused expenses to be incurred without reasonable cause or to be wasted by unreasonable delay or other default.

Non-application to solicitors

(11.3) Clause (11.2) (a) does not apply to a barrister or solicitor acting in the usual course of the practice of law.

Opportunity to make representations

(11.4) An order under subsection (11.2) shall not be made unless the representative is given a reasonable opportunity to make representations to the arbitrator.

Bias

(12) A party may apply to the Director for the appointment of a new arbitrator if the party believes that the arbitrator is biased and the Director shall determine the issue.

Copies of decision

(13) The arbitrator, forthwith upon making a decision in an arbitration, shall deliver a copy of his or her order together with a copy of the arbitrator’s written reasons, if any, to the insured person, the insurer and the Director.

(14), (15) Repealed: 1996, c. 21, s. 38 (6).

Non-application of the Arbitration Act, 1991

(16) The Arbitration Act, 1991 does not apply to arbitrations under this section.

Appeal against arbitration order

283. (1) A party to an arbitration under section 282 may appeal the order of the arbitrator to the Director on a question of law.

Notice of appeal

(2) A notice of appeal shall be in writing and shall be delivered to the Commission within thirty days after the date of the arbitrator’s order and the appellant shall serve the notice on the respondent.

Extension of time for appeal

(3) The Director may extend the time for requesting an appeal, before or after the time for requesting the appeal has expired, if the Director is satisfied that there are reasonable grounds for granting the extension, and the Director may give such directions as he or she considers proper as a condition of granting the extension.

Nature of appeal

(4) The Director may determine the appeal on the record or in such other manner as the Director may decide, with or without a hearing.

Power of the Director

(5) The Director may confirm, vary or rescind the order appealed from or substitute his or her order for that of the arbitrator.

Order not stayed

(6) An appeal does not stay the order of the arbitrator unless the Director decides otherwise.

Medical reports, special awards, expenses

(7) Subsections 282 (10) to (11.2) apply with necessary modifications to appeals before the Director.

Interventions

(8) The Director may permit persons who are not parties to the appeal to make submissions on issues of law arising in an appeal.

(9), (10) Repealed: 1996, c. 21, s. 39 (5).

Statutory Accident Benefits Schedule – Effective September 1, 2010, O. Reg. 34/10

Definitions and Interpretation

3. (1) In this Regulation,

“accident” means an incident in which the use or operation of an automobile directly causes an impairment or directly causes damage to any prescription eyewear, denture, hearing aid, prosthesis or other medical or dental device; (“accident”)

“insured automobile” means, in respect of a particular motor vehicle liability policy, an automobile covered by the policy; (“automobile assurée”)

“insured person” means, in respect of a particular motor vehicle liability policy,

(a) the named insured, any person specified in the policy as a driver of the insured automobile and, if the named insured is an individual, the spouse of the named insured and a dependant of the named insured or of his or her spouse,

(i) if the named insured, specified driver, spouse or dependant is involved in an accident in or outside Ontario that involves the insured automobile or another automobile, or

(ii) if the named insured, specified driver, spouse or dependant is not involved in an accident but suffers psychological or mental injury as a result of an accident in or outside Ontario that results in a physical injury to his or her spouse, child, grandchild, parent, grandparent, brother, sister, dependant or spouse’s dependant,

(b) a person who is involved in an accident involving the insured automobile, if the accident occurs in Ontario, or

(c) a person who is an occupant of the insured automobile and who is a resident of Ontario or was a resident of Ontario at any time during the 60 days before the accident, if the accident occurs outside Ontario; (“personne assurée”)

“Old Regulation” means Ontario Regulation 403/96 (Statutory Accident Benefits Schedule — Accidents on or After November 1, 1996), made under the Act; (“ancien règlement”)

Mediation proceeding

55. An insured person shall not commence a mediation proceeding under section 280 of the Act if any of the following circumstances exist:

56. The insured person has not notified the insurer of the circumstances giving rise to a claim for a benefit or has not submitted an application for the benefit within the times prescribed by this Regulation.

57. The insurer has provided the insured person with notice in accordance with this Regulation that it requires an examination under section 44, but the insured person has not complied with that section.

58. The issue in dispute relates to the insurer’s denial of liability to pay an amount under an invoice on the grounds that,

i. the insurer requested information from a provider under subsection 46.2 (1), and

ii. the insurer is unable, acting reasonably, to determine its liability for the amount payable under the invoice because the provider has not complied with the request in whole or in part.

Time limit for proceedings

56. (1) A mediation proceeding or evaluation under section 280 or 280.1 of the Act or a court proceeding or arbitration under clause 281 (1) (a) or (b) of the Act in respect of a benefit shall be commenced within two years after the insurer’s refusal to pay the amount claimed.

(2) Despite subsection (1), a court proceeding or arbitration under clause 281 (1) (a) or (b) of the Act may be commenced within 90 days after the mediator reports to the parties under subsection 280 (8) of the Act or within 30 days after the person performing the evaluation provides a report to the parties under section 280.1 of the Act, whichever is later.

[^1]: In its factum, Ayr Farmers raised a third issue, namely, the question whether Mr. Wright was involved in an accident. In oral argument on appeal, Ayr Farmers requested that this issue be remitted to the Superior Court if the answer to the first two questions is yes.

[^2]: The Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, S.O. 2014, c. 9, also known as Bill 15, came into force on April 1, 2016. Among other things, it amends the s. 279 scheme.

[^3]: This is a reference to Part VI of the Act, which relates to Automobile Insurance.

[^4]: Warwick was decided under the No-Fault Benefits Schedule, R.R.O. 1990, Reg. 672, but the principles remain applicable.

[^5]: In Chisholm, the SABs claimant brought an action for payment of SABs after mediation failed to resolve the issues between the parties. The insurer then moved under rule 21 for a determination whether it was legally obliged to pay benefits, a question that turned on whether the use or operation of an automobile directly caused his injuries. This court held that to succeed on appeal, the claimant had to persuade the court that he was involved in an accident.